Graeme Souness during nervous times at Newcastle. Photograph: John Watton/Empics

If you're going to have a blot on your managerial CV, you may as well make it a big disfiguring one. So how about the wanton and systematic destruction of the most successful club set-up English football has ever known?

In the 18 seasons before Graeme Souness became manager of Liverpool Football Club, the red men had only finished outside the top two places in the First Division once. In a year which saw them lift the European Cup. Compare and contrast with the help of my lovely italics: exactly 18 months after Souness took charge, Liverpool, having finished a lowly sixth in their new manager's first full season, found themselves languishing in 16th place in the league.

By that time, Souness had sold his best player, Peter Beardsley, to rivals Everton. He had replaced £900,000 Ray Houghton with £2.3m Paul Stewart. And most idiotically of all, he had doltishly offended all of Merseyside by selling the story of his heart bypass operation to a certain tatty smear rag on the third anniversary of Hillsborough.

Having reduced to rubble an empire that had ruled the English game for 30 years in as many months, Souness left Anfield under a cloud. The failure continues to define him. He is generally regarded these days as a managerial joke: witness the incredulous reaction of Newcastle fans when their club poached him from Blackburn, or the unfettered glee in Scotland when George Burley landed the national gig ahead of him earlier this year. But Souness seems to be constantly viewed in a harsh, unforgiving light rarely shone on other managers. He may not have had the tactical, organisational or motivational acumen to be bracketed with the Fergusons, Wengers, Mourinhos and Dalglishes, but those are heady heights. His track record stands up to scrutiny.

First, there were mitigating circumstances at Liverpool. OK, not too many, given the team were chasing for the 1990/91 title when he arrived. But Kenny Dalglish, mentally spent after the traumas of 1989, had run the team down: there are no excuses for letting John Aldridge go and signing David Speedie and Jimmy Carter, while a creaking defence demanded a total refit. The subsequent revamp was, as Souness freely admits today, fast-tracked at an unnecessarily alarming pace - Beardsley, Houghton, Steve Staunton and Steve McMahon were all sold before their time - but something needed to be done. Especially with Arsenal dominant, Leeds emerging, and Manchester United finally, ominously, getting their act together.

The FA Cup was a decent, if an unspectacular and occasionally lucky, return from his first transitional season. But then came the Loverpool story in the Sun, and the pressure was on. Souness now agrees that he should have resigned on the spot, as he had lost the battle of hearts and minds there and then. Still, the affair was borne out of blithe ignorance rather than malice, and while it's only within the powers of those directly involved in the Hillsborough tragedy to forgive, it would be nice to think one day Souness will one day be pardoned for his sin, as his contrition appears genuine, humble and (no pun intended) heartfelt.

In truth, Souness's biggest mistake at Anfield was passing up the chance to sign Roy Keane from Nottingham Forest, considering him too much trouble off the pitch to be doing with. But that's another story. Souness might have been a failure at Liverpool, but all things are relative: he still landed one of English football's big two trophies, and that would be something Liverpool would take another nine years to achieve again.

Souness's stint at Anfield has, unfortunately, overshadowed the quite spectacular job he did at Rangers. Again, some caveats: when Souness arrived at Ibrox in 1986, Aberdeen's all-conquering Alex Ferguson was about to depart the Scottish scene. Hearts had just enjoyed their historical one good season in 30 (and of course won nothing). Dundee United were on the way down, though they had one spectacular year in the Uefa Cup to come. And Celtic were down on their uppers, with two bawbies and a boiled sweetie clanking around the biscuit tin under the bed which doubled for their bank account.

And yet. Rangers were in no fit shape themselves when Souness arrived, having finished fifth in the league in 1985/86. Admittedly helped by the Heysel ban affecting English clubs, Souness homed in on two huge signings, using his force of personality to persuade two of England's hottest talents - Ipswich defender Terry Butcher and Norwich goalkeeper Chris Woods - to up sticks for the Scottish Premier League. Within the year, Rangers had romped to their first league title in nine years, their signature performance a late-in-the-season 3-0 rout of Hearts at Ibrox which could have ran to double figures.

Souness would win three titles in four years at Ibrox, lining up another before leaving for Liverpool in April 1991. It's also worth remembering that while Celtic weren't burdened with huge wallets, their 1988 centenary side featuring Frank McAvennie provided better than decent opposition, while the Scottish league wasn't the two-horse nonsense it would become by the late 1990s, with Aberdeen coming second three years in a row.

Anyway, if breaking the sectarian ban at Ibrox by signing Mo Johnston in 1989 doesn't count as a major managerial achievement, we might as well all pack up and go home. Which is something that equally applies to his antics at his first post-Anfield club, Galatasaray.

Souness's stint in charge wasn't a roaring success. His side, built around Dean Saunders, were league stragglers and suffered an early exit from the Uefa Cup - nobody's going to fight the fight for Souness on the European stage, that's for sure - and they needed to win the 1996 Turkish Cup final to salvage their season. Which they did, thanks to a late goal from Saunders in the stadium of arch-rivals Fenerbahce. Cue Souness's infamous flag-planting escapade - which drew parallels with a similar incident on an Aegean island which once nearly led to a war between Turkey and Greece. Souness was sacked three weeks later as a result of his league form, but again he had made a mark.

From then on, it's a mixed bag. He kept Southampton up in spectacular style - his side are still the only Premier League team to put six past Manchester United - but infamously signed Ali Dia, the amazing non-footballing footballer. Spells at Torino and Benfica were unsuccessful - presenting a public weaned on Eusebio with Mark Pembridge and Scott Minto was never going to fly - but back in England he won promotion, then the League Cup at Blackburn, where he built a side featuring Damien Duff, Andy Cole and David Dunn that was easy on the eye and beat Arsenal home and away in 2002/03. His swansong at Newcastle wasn't great, but the club has, for one reason or another, been basically ungovernable since Keegan left in 1997 anyway. And is wasting £8m on Jean-Alain Boumsong really much worse than spending £9m on Francis Jeffers, for example, or £28.1m on Juan Sebastian Veron?

Still, is this all so bad? Souness is never going to be bracketed with the managerial greats - striving for the very highest office and falling short has inevitably clouded perceptions - but anyway that's not the argument. He should simply be afforded the sort of respect given to other decent managers who never took themselves, or have yet to make it, to the very top level. (Does, for example, Martin O'Neill - like Souness, the collector of leagues and cups in Scotland, cups in England - have to put up with such mockery?) Souness might not be up there with the best, but he deserves to be up there with the best of the rest.